Communication and conflict resolution within a family business - Essay Example

[Your full full March 31, Communication and Conflict Resolution within a Family Business Before going into the discussion regarding communication and conflict resolution within a family business, let us get a better understanding of what family business actually is. A family business, mostly known as public companies, is a type of business, which is governed by the members of a single family. In a family business, members of the same family remain at the top positions of the company and control main operations of the business.

In this paper, we will discuss how members of a family business resolve their conflicts and issues that may take place within their business. Background of the Business The name of the business, which we are going to discuss, is One-World Technologies, a software development company. The company was established in 2010 and is located at 314 West 23rd Street # 65, New York. The company not only develops high quality software products but also provides valuable consultancy to other firms. The mission of the company is to provide highly reliable software products to the customers.

The short-term goal of the company is to make an early impact on the information technology industry of the United States whereas long-term goal of the company is to become the top software company of the country. Four family members carry out major business activities related to the company. Mr. Jack Dawson owns the company whereas his sons, Steve Dawson, Nicholas Dawson, and Mark Dawson run the finance, marketing, and software development departments respectively. Steve is responsible for all affairs related to finance department of the company.

Second son, Nicholas, carries out all marketing activities. Third son, Mark, manages the software development department. He has hired three software engineers who develop the software products. Let us now discuss a conflict which occurred within the business and the father of three sons, Jack Dawson, resolved the issue successfully for the benefits of the company. Discussion of the Issue The issue, which we are going to discuss, is related to profit distribution system of the company. Mark Dawson, manager of the software development department of the company, raised the issue.

He argued that the father does not distribute the profit among the sons based on work distribution. His claim was that his department is the main department of the company without which the company can never run its business. He also said that he is unable to manage the salaries of the employees from the profit, which he receives from his father. The claim was valid because Mark had employed three software engineers in order to get assistance in software development. Although Mr. Jack Dawson used to give more money to Mark because of his nature of work, still Mark claimed that it is difficult to manage the share for himself and his three employees properly with the current share of profit.

Moreover, Mark’s elder brothers were also not happy even with the current ratio of profit distribution. They claimed that Mark never distributes employees’ salaries in a transparent manner. This profit distribution also caused tensions between Mark and his brothers. Mr. Jack Dawson was now fully aware of what was actually going on in the company. He knew that Mark had some concerns regarding profit distribution but he did not want to give full control of employees’ salaries to Mark because of other sons’ objections.

Therefore, he decided to make the profit distribution ratio as 1:1:1 and take partial control of Mark’s department by managing the employees’ salaries personally. He communicated the solution to his sons and all of them including Mark became happy with the solution. Relevance to the Topic The issue discussed above relates to the topic because it is one of the main conflicts that can occur in any family business. Some other factors which cause conflicts among the family members include location based conflicts, management related conflicts, and initial investment based conflicts.

Profit distribution among the family members is a major conflicting issue, which mostly results in creating tensions in a family. Unequal profit distribution causes many problems not only for the business productivity but also for the members of the family. Even in the issue discussed above, the tensions among the brothers kept on increasing due to the factor of profit distribution. What Can Be Learned One can learn from the above-discussed issue that profit distribution is the main factor, which not only causes conflicts among the family members but also affects the productivity of a business.

A person may transfer management of the business to any one of the children but should transfer equal shares of business ownership to all children (Ward). Therefore, owners of a family business should give extreme importance towards work-based or equal distribution of profits in order to avoid occurrence of any kind of conflicts. Works Cited Ward, Susan. “Family Business Succession Planning.” About.com, n.d. Web. 31 Mar. 2011. .